Invest Your Rent

Invest Your Rent

Why Pay Your Landlord’s Mortgage?

Invest Your Rent

Invest your rent. It makes financial sense because the only one who benefits from a rent check is the landlord. Renters never see that money again, while homeowners usually profit when they sell. In addition, renters can’t use any of their rent payment as a tax deduction, like homeowners can. If you or someone you know is renting, it’s time to put that rent check to better use! We can help make that happen for you, just call or email us at Luxury Valley Homes. We have some special programs for veteran loans, so if your a veteran, talk to a veteran that has already been through the process and has helped dozens of others find a house they could call home.

The mortgage-interest deduction is probably the best financial argument for buying rather than renting. Consider this example:

If you can afford a mortgage payment of $1,000 (principal and interest only), you can buy a house for $151,426 if you put 10% down on a 30-year mortgage at 8% interest. If your payments started in January, you would pay $10,862 in interest for the first year in the home. That entire amount is deductible on your federal income tax return! Assuming you are in the 27.5% tax bracket, you would save $2,989 in taxes, or $249 per month. So your $1,000 payment is really only $751 when you factor in the homeowner’s tax advantage.

Can A Renter Really Afford To Buy?

The real question is whether renters can afford not to buy. The tax savings alone make the purchase of a home a wise financial decision. But let’s go a step further.

Using the same example, a 10% down payment would create an immediate equity of $15,142. Assuming the $151,426 house grows in value by just 3% a year, in five years it would be worth $175,544. The original loan amount would then be down to $129,565, yielding an equity of $45,980. In addition, remember the nearly $3,000 tax savings every year. The total value of your equity and tax savings would be almost $61,000 after five years.

Pick A Loan

To take advantage of the financial benefits of homeownership, renters must first find out how much buying power they have. We can help. Call us for information about the whole range of mortgage options now available, including low- and no-down-payment loans, and programs that allow buyers wrap home-improvement costs and closing costs into the mortgage.

Plan Ahead

Invest your rent means investing in yourself. Keep in mind that some lenders allow buyers to use up to 41% of monthly income to purchase a house, beware of becoming “house rich and cash poor.” Be sure to budget for home ownership costs beyond the mortgage, including expenses for:

moving

decorating and furnishing

homeowners insurance

property taxes

homeowners association fees (if any)

utilities-power, water, sewer, cable, trash pick-up

yard tools, supplies and general upkeep

home repairs, supplies, cleaning and upgrades.

Today, home ownership is a wonderful dream-come-true for more people than ever before. Let us help turn those dreams into a home to be proud of.

Article: Invest your rent, is brought to you be the Luxury Valley Homes team.

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Jeff and Jane Daley started their careers in real estate after taking early retirement from the corporate world in October of 1999. Their success is achieved by way of their core values.
MILITARY SERVICE: Jeff is a Vietnam combat veteran and served in in the US Army. He served with distinction, and received multiple citations.